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To See Where World’s Easy Money Is Going, Look at the Ruble

  • Ruble offers investors second-best carry returns this year
  • Options traders least pessimistic on currency since mid-2014
Rubles
Photographer: JB Reed/Bloomberg
Updated on

For an example of how the global clamor for yield is drowning out the risks in the world economy, look no further than Russia’s ruble.

Investor demand for higher returns has eclipsed a drop in oil prices and pushed the ruble’s correlation with crude to the lowest in a year. The currency of the world’s biggest energy exporter has turned from one of 2015’s five worst emerging-market performers to the third-best this year. Russia’s economy shrank 0.6 percent in the second quarter from a year earlier, the least since a contraction began at the start of 2015.